Kodak's Bankruptcy: Manufacturing a 21st Century Rebirth

ROCHESTER, N.Y. (TheStreet) -- The George Eastman House, a museum dedicated to the life of Eastman Kodak's founder, is so steeped in the company's mighty past it isn't presenting a future.

Curator Kathy Connor and the Eastman House have collected a century's worth of Kodak's camera breakthroughs, blueprints of factories that no longer exist, and photos of what used to be called Kodak Park, once the world's largest industrial complex. It is a museum that captures Kodak's best memories and the personality of its founder, George Eastman, but says little about what lies ahead for the 133 year-old company.

Kodak fell into Chapter 11 bankruptcy on Jan. 19, 2012, after a 30-year collapse of its dominant film business and a failure to identify a next big idea to replace it. The company has since sold many of its most recognized businesses and inventions.

As Kodak prepares for a second-life outside of bankruptcy, the company is likely unrecognizable to a historian like Connor. The hope, however, is that Kodak can give Eastman House one more story to present to visitors.

Eighteen months ago, many assumed Kodak's restructuring would result in a liquidation of the American corporate icon. Instead, the company appears to have found a toehold in businesses that are at a crossroads of technology and manufacturing and are squarely of the 21st century.

Kodak now positions itself as a maker of printers with up to 90% of revenue coming in the form of recurring digital printing plate, services and ink sales. More importantly, investors feel the company has the capability to use its printing assets to manufacture semiconductors, holographics, batteries, biomedical devices and circuitry.

Overall, Kodak optimistically forecasts its printers, ink, plates and toner will serve a $720 billion commercial printing and packaging market that could grow at near double-digit rates globally in coming years. Kodak will also retain its famous motion picture film business, a fixture on Hollywood silver screens up until a few years ago.

Kodak is currently conducting a $406 million rights offering, which will allow creditors to exchange billions in claims against the company for shares. Unsecured creditors are poised to see a minimal recovery on their claims, while Kodak recently said in an amendment to the offering second-lien holders will get a full recovery.

The company is scheduled to present a reorganization plan in a New York court on August 20, with the prospect it exits bankruptcy shortly thereafter.

Sources familiar with Kodak's bankruptcy process say the company will be re-listed on the New York Stock Exchange shortly after it exits bankruptcy.

Even so, the company will be a shade of its former self.

In the late 1980s Kodak swelled to 145,300 worldwide employees, and in the 1990s the company hit a revenue peak of over $16 billion and a market capitalization of about $30 billion.

Kodak's total capitalization will now be about $1.2 billion, the company said in a July 15 presentation to lenders. It forecasts 2013 revenue to be around $2.5 billion, a drop from the previous year. Kodak may also end the year with fewer employees than it shed in 2012 alone.

Those projections, however, may position the company for its first growth spurt in decades.

By 2017, the company expects annual revenue growth of over 6%, buoyed by 20% compound annual growth from its Digital Printing & Enterprise business. The company's margins are forecast to nearly triple to 15.4% in that time horizon.

Kodak spokesperson Christopher Veronda expects that after the company exits bankruptcy, it will restart recruiting programs at college campuses and eventually begin hiring again.

Sources also say Kodak will look to reengage with the Rochester community, after the company froze its once-generous charitable contributions during bankruptcy.

If there is anything positive about the fall of a former manufacturing titan, the near-wipeout of billions in non-pension benefits to the company's more than 50,000 retirees, and steep losses by most investors, it is that Kodak's bankruptcy doesn't appear to be its end.